The 74th Amendment: Institutionalizing Urban Self-Governance

Q: Examine the impact of 74th Constitutional Amendment on decentralisation of power and functioning of Municipalities.

The 74th Constitutional Amendment Act (1992) was enacted to grant constitutional status to Urban Local Bodies (ULBs). It aimed to transform Municipalities from administrative appendages of the State into vibrant units of self-government, addressing the challenges of rapid urbanization through Democratic Decentralisation.

1. Impact on Decentralisation of Power

  • Constitutional Uniformity: By adding Part IXA and Articles 243P to 243ZG, the amendment mandated a uniform three-tier structure (Nagar Panchayats, Municipal Councils, and Municipal Corporations) across India, ending the era of arbitrary state control.
  • The 12th Schedule: It devolved 18 functional items—including urban planning, regulation of land use, and poverty alleviation—to ULBs, providing a specific jurisdictional roadmap.
  • Fiscal Institutionalization: The requirement for State Finance Commissions (Art. 243Y) forced states to establish objective criteria for sharing revenues with cities, facilitating Fiscal Federalism.

2. Impact on Functioning and Inclusivity

  • Empowerment of Marginalized Sections: Mandatory reservation for SCs and STs and at least one-third of seats for women has diversified urban leadership. In Odisha, 50% reservation for women in ULBs has significantly improved the gender-responsiveness of urban planning.
  • Ward Committees: The provision for Ward Committees (Art. 243S) was designed to bring governance to the doorstep of citizens, though its implementation varies across states.
  • District Planning Committees (DPC): Mandated under Art. 243ZD, DPCs were intended to consolidate plans from both Panchayats and Municipalities, fostering integrated spatial planning.

3. Persistent Functional Challenges

Despite constitutional backing, the substantive power of municipalities is often constrained:

  • Financial Fragility: ULBs remain heavily dependent on Inter-governmental Transfers. The abolition of Octroi and the constraints of the GST regime have limited their "Own Source Revenue."
  • Overlapping Jurisdictions: Parallel bodies like Development Authorities (e.g., BDA in Bhubaneswar) and Smart City SPVs often bypass elected municipal councils, leading to a "fragmented executive."
  • Human Resource Gap: Many municipalities lack the technical expertise (urban planners, engineers) required to manage complex modern city infrastructures.

Definition of Key Term

Principle of Subsidiarity: The governing principle of the 74th Amendment, stating that functions should be performed by the lowest level of government capable of executing them efficiently.

Conclusion

The 74th Amendment has successfully created Political Decentralisation, but Administrative and Fiscal Decentralisation remain incomplete. For Odisha's growing urban centers, moving toward the "Mayor-in-Council" system and enhancing e-Governance through initiatives like JAGA Mission are essential to fulfill the constitutional promise of true urban self-rule.

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